Karachi, October 14, 2024 – The Pakistani rupee saw a slight depreciation on Monday, closing at PKR 277.66 against the U.S. dollar in the interbank market. The currency edged down by 2 paisas from last Friday’s closing value of PKR 277.64, reflecting a marginal decline in its value.
Currency experts attributed the small drop in the rupee’s value to an increased demand for U.S. dollars, driven by import and corporate payments, typical for the first day of the week. Despite the rupee’s slight weakening, experts remain optimistic about the currency’s performance in the coming days, citing improved foreign inflows and macroeconomic indicators as supportive factors.
According to the latest data from the State Bank of Pakistan (SBP), the country’s total foreign exchange reserves increased to $16.05 billion, representing a $64 million rise during the week ending October 4, 2024. This improvement in reserves, up from $15.983 billion the previous week, is expected to bolster the rupee’s position and contribute to stabilizing the currency.
In addition to enhanced reserves, analysts highlighted improvements in Pakistan’s trade balance and current account deficits, which have both narrowed significantly in recent months. This narrowing has led to positive sentiment surrounding the rupee’s future prospects. “The shrinking of both the trade and current account deficits is a good sign for the rupee’s future performance,” commented a currency expert. As these deficits reduce, there is less pressure on the rupee, easing the reliance on foreign currency reserves for external obligations.
The rupee’s stability is also supported by anticipated increases in export receipts and steady inflows of workers’ remittances. Remittances, in particular, play a crucial role in offsetting the rising demand for foreign exchange, and they are expected to provide significant backing for the local currency in the months ahead.
While these developments offer a cautiously optimistic outlook for the rupee, market experts warn of potential risks. Fluctuations in global economic conditions, alongside domestic challenges, could still affect the rupee’s stability. However, the current trend of strengthening reserves and improving trade dynamics suggests that Pakistan’s efforts to stabilize its currency and economy are moving in the right direction.
Looking ahead, experts remain hopeful that ongoing efforts to bolster foreign exchange reserves, reduce trade deficits, and attract foreign inflows will continue to lend support to the rupee’s performance in the near future.